Earnings call transcript Q2 2023

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Operator

Good morning, ladies and gentlemen. Welcome to the New Jersey Resources Fiscal 2023 Second Quarter Conference Call and Webcast. At this time, all participants are in a listen-only mode, and please be advised that this call is being recorded. After the speaker’s prepared remarks, there will be a question-and-answer session. [Operator Instructions]

time, like this over turn at Mr. to now I to would things And of Investor Director Prior, Adam Relations. Mr. go please Prior ahead sir.

Adam Prior

team. here webcast. Thank Resources you. Roberto of Financial am Bel, and and Vice and other members Officer; fiscal Jersey Steve management joined I Chief XXXX second our our our Welcome quarter conference CEO; to President today by New as President as Westhoven, Senior call senior well

from meaning of Certain call today's the forward-looking the our in call slide expectations for estimate statements to estimates that control as wish many contain that expectations, factors assumptions this other securities X. or are statements and differ and beyond precisely. the This basis caution results beliefs, our statements in conference current ability cause to of forward-looking found our We laws. could forming include within materially listeners to the

of furnished this our revise in items future also the forward-looking statements any be events. found particular in filed including as do Forms and SEC. to review in obligation herein forward-looking assume any the statement X-K with We release light not today's section most referenced and XX-Q Form by These statement of earnings XX-K recent or can on

and performance. our to margin will We of financial margin earnings loss, provide measures believe financial understanding certain or a complete financial that be We financial also such referring gross utility NFE. financial more non-GAAP as net NFE, net

However, to GAAP. these a non-GAAP are measures not intended for be substitute

item XX-K. financial Our seven fully discussed of measures non-GAAP our in are more

on our morning. filed are available on The website slides were this our presentation X-K accompanying furnished and Form today's

open Then X. financial highlight, this who by agenda will for review will today questions. followed slide results. Steve begin will with found it your quarter's Our for is Roberto our we up on

the Steve. turn to Steve Please CEO, Westhoven. I President over go that said, ahead our and will call With

Steve Westhoven

our in good had strategy and Thanks another morning results with executing delivering quarter, Adam line and expectations. our We everyone. solid

of share fiscal quarter per this XXXX of the reported per $X.XX our $X.XX reiterating are we earnings NFEPS year. to range $X.XX second we in Overall, financial share. addition, In guidance of net

the New the During the first utility Gas from in country calendar of Jersey decoupled, our the recorded much weather the gross weather But changes Natural history. quarter margin remember is and meaning experienced usage. warmest to utility Eastern due customer insulated half of

We continue Jersey achieved strong New higher growth the Natural gross for to a see margin trend in Gas and at utility period. customer

cost in by In addition, rates credit and we prices. recent to a the customers natural issuing provide gas decrease savings were bill our able lowering to following

monitor costs our conditions to market to to use continue and expertise savings manage our will whenever We and customers provide possible.

service CEV, another performance In in service, commercial growing potential which an XXX Gateway capacity energy solar was the Adelphia assets. operating to additional This end generated by River the profitable opportunities finally, of winter increases six transportation year. we our and Leaf XX% solid resulted our into projects for total placed from solar and storage unusually over those maximize since we fiscal quarter. usage installed our Energy organic our megawatts. business, continue growth And At the warm, lower to to in Services although and benefited explore

X. slide to Turning

year. Natural our per higher our to range are Jersey contribution initially at $X.XX As results reiterating of by outperformance I share. guidance quarter of to fiscal the during storm Gas first Elliott $X.XX following from we in NFEPS last Energy this noted Services and New XXXX earlier, $X.XX December raised winter guidance We due

for end rate from to of growth long-term to XXXX. at XXXX original expected X% that the Our our NFEPS fiscal range in be guidance expect and remains higher X% we

with over first as had Jersey the Natural six $XXX invested CapEx providing customers fiscal that We X,XXX of in million during the customer returns. Gas Natural compared first the months We New the of customers Jersey over Gas to XX% new near strong year XXXX strong on X. growth adding during highlighted year. in quarter real-time six approximately New same a X,XXX reported months slide last period of

to prior on consistent timeline fiscal our next investments. technology indicated our XXXX calls, file As we rate in expect of the case major with

Moving to Slide X.

see Clean into We have positive service. of continue to end Energy XX momentum solar XXXX, the Ventures. Since fiscal projects megawatts placed we at of new

and We late-stage diverse outside through the New of we and in milestone pipeline landfills solar to continue within of investments and repurposing including development, continue of maintain solar a stages of arrays. Jersey. projects renewable producing robust of and And to various floating deployment energy both innovate clean greenfield

Over the solar past Board program, December New few the CSI the Incentive, X of Public In New megawatts. projects Solar this policy. Competitive approved to solar of projects Jersey's months, Utilities for Jersey in we have Through megawatts state's seen seeks program year. over award progress XXX Jersey New per

program is to another commitment continued Although, to energy New that of see specific are we timing its results sign CSI be still targets. the Jersey's determined, renewable

I review will Roberto? the over call financial to that, Roberto a With results. the for turn of

Roberto Bel

Slide main good first second you, drivers of XXXX. fiscal half Thank our NFE the and and everyone. X quarter morning shows the of Steve, for

$XXX per a For with share, represents the $XX.X our year. net a we of in share first improvement financial improvement earnings or share period. half XX% or in last our compared This was results. reported per million, for $X.XX the consolidated fiscal Year-to-date million, per year-over-year strong XXXX, NFE $X.XX

reported per or the million, million, of share XXXX, we last with compared For quarter or of year. $XXX.X $XXX.X per second share $X.XX $X.XX NFE fiscal

which businesses Adelphia Gateway S&T revenues Through depreciation higher the the and New Jersey and and interest at Energy higher timing impact of utility quarter now related by at $X our being than this service margin lower expenses, include gross higher higher compensation into our of related offset IT to the investments financial CEV NPL at earlier accruals margin our to Services placed were incentive million more fully expenses year. Gas a performance difference in Natural and

to plan Turning capital Slide on XX. our

we $X.X these billion between track invest expect and billion before and said have across we on year levels. $X.X plan capital our company As investment and for to fiscal the to XXXX XXXX, remains achieve

quarters, tighten regulatory ranges CapEx more specifically CEV, on in time future PJM interconnection our to and clear. as become outcomes projects expect We Jersey certain the New lines at

We for are the have end. lower fiscal XXXX the comfortable our opportunities CapEx higher toward of CEV number and could with us range of a end that move

to projections for a program NFEPS waiver while plans X%. capital equity have anchored Our strong basis. to to flow discount are by opportunistic long-term we with X% us equity our feature an on that block operations and and target And no includes dividend fiscal XXXX consistent of XXXX reinvestment issue from growth existing our raise cash allows

will to back I call the that, With turn Steve.

Steve Westhoven

Roberto. Thanks,

for XX. Murphy New cleaner forms state's revised series reaching of emissions future. announced to executive of reduction We company's Jersey's energy role Turning Slide March and In long-term with our carbon and Governor, targets orders state plans clean energy the embrace in Phil goals. transitioning to a the

toward reduce has been executing gas and it's NJR greenhouse to emissions. on years strategy cleaner a energy working decarbonization dramatically future our many for and

innovation. With efficiency encouragement of the state, have modernize technological strong through reduce and the we advance energy infrastructure to invested our billions emissions

the We have discussions with had state policymakers. preliminary

to collaborate the in regulators with We unfold. as will utilities processes these state continue and other our

company our our long-term complementary I growth aligning range strength to But well employees our work infrastructure energy future. customers, an reaffirmation reflects of of clean energy on of also our all the for as rates the needs with and their contribution. focusing portfolio as is The NJR conclusion, meeting of businesses. In want the of guidance hard thank and

that, questions. now open the I With will call for

Operator

from Mr. this morning Westhoven. We take our will Mr. Richard [Operator Instructions] JPMorgan. question of first you, Thank Sunderland

Richard Sunderland

Hi, good morning. Thanks time today. the for

Steve Westhoven

Hi Richard.

Richard Sunderland

Starting with CEV.

this New of to compared in-state how from You CEVs this out-of-state. when the efforts at out-of-state Jersey versus and initiative? broader speak you to saw you the attractiveness relative point you how in the could and Curious see opportunities ago years particularly are a your few if pipeline expectations shift back unfolding regional to launched

Steve Westhoven

Richard, for the question. Yes thanks

XXXX back ability we Day, our returns. go And of Jersey. based place we be highlighted of strategy the able our in provide a that we our that was built you have state on and the have going New this and in diversify to to the that Investor capability If outside investments here invest really forward to company certainly solar to

a New Jersey. diversification also a then And of State bit of the outside of little

is the the I being projects able return. to looking to it highest get and capital think healthy accomplish

profile as we and that Remember one that company structure look risk that. really aligns subsidies for like things the outside feed-in really to with tariffs look our overall similar fits simulates a credits that the that or state we the are REC in sure make

The percentage to continue go we the to seems XX-XX expect and that level forward. to be around

New Jersey. some and outside really of our expected overall shift planned investments and So, that the success of state you a in the of of the for by strategy are seeing some we

Richard Sunderland

Got helpful there. it. That is very context

Just a on follow-up quick front. that

of in kind here again high of opportunities? are Jersey revising for regional balance consideration and you what move exactly what the end you revisit in opportunities just these could both seeing So, would those consideration here looking you in you outlook to New are in of particularly CapEx what the of

Steve Westhoven

year Yes, flow stayed lot and like of the range CapEx for regulatory I have things some and think for end waiting amount we of this We the comfortable of a the Still decent fiscal feel approvals range. left. deal our this the we of year in expectations. got space have through And at lower permits that.

within it what that we your see through in the the stay if end to the we is question. year range helpful So, that potential be for of but to answer is range

Richard Sunderland

drove could have And normalized guess a few you base this certainly. Curious at outperformance what over little Is past you the And parse services transportation quarters. the XQ more more some of shifting a for least? and storage of now gears, year-over-year decline? the finely? it, I results considering quarterly Got hub had then the

Steve Westhoven

am to of take operations. that transition active a So, bit a construction ask going question. to There I is little going an to from Roberto

Roberto Bel

is this Roberto. Rich Yes.

up. more to that basis. actually year-to-date is that So, business the And on a revenues out and this are I it see pieces dramatically the think it And is look you you year-to-date helpful break will actually unit part at into when up. way

amortization the have and expenses equity. you service more have And we depreciation what is came the at AFUDC particular higher and of fiscal don't quarter Adelphia any affecting you end year and remember into in interest because last have higher

much better. from break the it are perspective those better actually earnings of you that are we year than last and doing complexion when So,

earnings discussion to non-cash of is some year All now before. had the this we compared

Richard Sunderland

very Thanks and time That thanks for Got it. for that the today. was clear.

Steve Westhoven

Richard. Thanks

Operator

Instructions]. go to you. next Travis We at Miller now [Operator Morningstar. Thank

Travis Miller

morning. Good you. Thank

Steve Westhoven

Travis. Hey

Travis Miller

the possibility? that thinking any Is about that on about the that from far of kind cost half thoughts so range, year performance or end Given Is investments? pulling XXXX first are the up? that a to of you high here fiscal and any something forward thinking set

Steve Westhoven

fiscal the that have up we I guidance to And moving things all I year. that we to do tend set speak really think are things going point. any itself. we to saying around don't for certainly, the things our to be speaks about

got have got stated those we earnings speak our projections, we have our and as let So themselves. we

Travis Miller

transportation. good. delta quarterly And that? Services, Energy on then question there? Very provide you Any Okay. to storage What could about on the the that similar last and details

Steve Westhoven

was different I a year mean year. dramatically this last than it year

decent still But got have well. quarter, last low performed able the to a they guidance earnings for is which positive a certain achieve extent, It you this well. in doing use So back quarter energy quarter Energy are our us and year very are and going this very delta. they to has a allowed to Services raise group

I difficult So because a that little performs volatility quarter-to-quarter only basis. but can does and color happens I that comparisons how when on quarter-to-quarter be give unit is of bit a can the know this the

Travis Miller

Okay.

a being big usage factor? the So

Steve Westhoven

Yes.

Roberto Believe

once than This that I at Roberto. would Yes. the Steve say is Yes last is year. what the said, again performing is better business year-to-date to actually what looking

And better. are basis an so overall we on doing

Travis Miller

good. Very I all had. Okay. That’s Thanks.

Steve Westhoven

Travis. Thanks,

Operator

at next Mosca go Mizuho. now Thank you. We to Robert

Robert Mosca

thanks, everyone. Hi,

working present you cash on was it talk on gas you CFO So the did Is to benefit guide, like flow capital prices. outlook not the there a might as case not just conservatism? about a guidance, just despite modeling that there? seem Can your in be why near-term falling change your the

Steve Westhoven

just that of I beginning can the that? catch repeat because you didn’t Robert, Hey, question

Robert Mosca

Sure, yes.

seen has was So bit flow outlook? just been your something Could talk here. a change working a about your guidance not Is why there have from in or cash little that might you else? capital we not modeled conservatism operations of a in that or benefit

Roberto Bel

is this Robert, Roberto.

is year our results see the what what cash quarter. flow in XX-Q actually. you our guidance our see changed you So from Remember, for can last year-to-date operations there in were once is look we performing has you at not results. that well very And our

So within we again and not for the year, modifying those expectations. we exactly projections are our are

Robert Mosca

just I capital uplift, prices? the think if there guess, on next it a asking of were couple conservative working you gas I to in with am was quarter prior prices I the said for outlook years fall? being And you Right. sequential Are that gas

Steve Westhoven

to it's Robert, understand hard you.

Something speak for only wrong maybe louder, up with that. in the and Can that you question line. repeat

Robert Mosca

guys. will be Sorry, better. maybe this

you So taking a capital I I in working prices guess is conservatism might we was that and of quarter am the fall, that, gas of past guidance. had what I to your see were were you -- benefit an think asking in if said element kind

Just being included that yet? is why wondering, and guidance in not XXXX XXXX maybe the

Steve Westhoven

Yes.

say But numbers. some to it updated especially linear year. So, you right? in that, upside is superbly are XXXX, too we fully haven't is in But the incorporated may we early that right, the have which not We yet. again, in are

Robert Mosca

fair. in assessing and that maybe are your Okay. remarks, or at you you storage That this? that you Leaf transportation. think are River, like Can asset those within they I looking is Coast. outside mentioned of Gulf or on separately, in kind It along opportunities sounds the And thoughts? of Is prepared expand opportunities around then

Steve Westhoven

conversations to in lot electric and puts from I like the and see, expansions say down built will liquefiers can or But either volatility This assets. there a generation LNG lot services announce, things that. And that. being there. from in potential on Gulf pressure, about a growth you region is Coast Nothing are of certainly that usage talking of the

just So, to but those in are nothing demands places we bit natural grow, again, a our conversations. markets, these having gas assets serve some able be good of giving around that. color as But announce, are little to to of

Robert Mosca

Okay. that impacts me, one last from Appreciate energy it, to your access. any is system in Steve. just service regional And from early then

Steve Westhoven

which get supply certainly to So any will the impact very more needed. we much region, is

past You we to amount utilities contractor for seen extreme that have that that. can is the in see Gate, here, is by price an our that demand the high there gas for City of and

So more using will and we the service. to is comes that it contract when reliable the into supply on contracts be welcome it always area firm

Robert Mosca

time, everyone. Okay. the Great. Thanks for

Steve Westhoven

you. Thank

Operator

today. Instructions] for I [Operator to management have we It appears the closing remarks. the questions like no team, additional would to back any further conference turn or

Steve Westhoven

thank joining us everybody, for to this I'd like morning.

on call available this for of recording a reminder, a As is replay our website.

in to we a at interest forward you seeing AGA you, your investment many appreciate we month. And later always, Thank of and As in this NJR. look everyone have good morning.

Operator

Jersey Westhoven. all, Conference Ladies New again, conclude Fiscal gentlemen, Thank like Quarter so you, joining and webcast. Mr. day. that all us does Goodbye. wish thank a for you and much Second the would and you to Call XXXX Resources We great

New Jersey Resources (NJR) 4 May 232023 Q2 Earnings call transcript